As the stock market is blowing up its been the Bond Market that been rising as of late.
This is a chart I wished that I had seen sooner.
Clearly the market is saying hey maybe things aren't as great as we think and maybe we'll just put our money in low yield bonds rather than risk.
This backed off with rally this week but if you look at the direction and you think that we aren't going to push back what is VPOC and least touch it I would be surprised.
This means more uncertainly in the stock market so we might go now where quick from here as equity is distributed and or possibly a significant move downwards.
Hard to see the markets climbing higher with more conviction from the Bond market. However looking this profile even if everything is going to be ok - there going to scare the market - this a daily chart so this could be a couple weeks.
This visible point of control (pink line) runs there for about two years and that was deemed support.
Its not coincidence that there a a VPOC at the top and the bottom - this indicated to the market this is the turn. Its perfect if you know what look for - and that is the thing about bonds they do a good job of ticking back to the previous days VOC to strike it out.
If you don't strike it out - it means it may be revisited.
So I think you can go long bonds or TLT - maybe this could be a pretty good Iron Condor or straddle in the options market as most likely Bonds will sit here for a while they figure it out.
While in the US there has been growth and inflation this not true in the rest of the world. This is what it boils down too - so until growth picks up outside the US the markets will stall or at risk. Of course putting Covid behind would go long way.
There is a great video attached that explains what's going on the bond market from Jeff Snider. If you really want to know what's going out in broader scope it's incredibly informative.
youtube.com/watch?v=n_sc-H5QYSo
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Disclaimer
The information and publications are not meant to be, and do not constitute, financial, investment, trading, or other types of advice or recommendations supplied or endorsed by TradingView. Read more in the Terms of Use.